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Nessel's office fields 823 consumer complaints on COVID-19 price-gouging, scams

Beth LeBlanc
The Detroit News

More than 800 people have reported alleged price-gouging or other scams in Michigan related to the COVID-19 pandemic in a space of about five days, according to Attorney General Dana Nessel’s office.

The department had received 823 complaints of price gouging by businesses through 5 p.m. Wednesday, up from 572 complaints as of 11 p.m. Tuesday.  

Nessel’s office had sent cease and desist letters to at least four sellers, including a Hillsdale resident selling face masks on eBay, a Menards store selling bleach, face masks and other products at high costs, and an Ann Arbor cleaning supply store advertising Purell online for $60, $40 and $20. The latest letter was sent to Norkan Inc., a Warren-based business, for selling a 10-pack of face masks on its website for nearly $80, while similar products at other retailers sold for around $23.   

Attorney General Dana Nessel answers consumer complaint calls related to COVID-19 price-gouging and scams on Tuesday, March 17, 2020.

The department also has requested additional information on pricing from several companies. 

"We all have the same interest and same goal here, which is to protect the interests of residents in our state," Nessel said. 

Nessel herself on Tuesday helped staff the office’s consumer complaint line, which has expanded its usual 8:30 a.m. to 4:30 p.m. weekday hours and added noon to 5 p.m. shifts on the weekend. 

In addition to tracking price-gouging, Nessel’s office also has been tasked with helping to develop some of the nearly dozen COVID-19 executive orders stemming from Gov. Gretchen Whitmer’s office and ensuring their proper enforcement. 

Enforcement of those executive orders has so far not been confrontational, Nessel said, and she hopes it remains so. Law enforcement has had to occasionally remind facilities of closure orders or assembly limits. 

“We’ve seen instances where people have opened and they just didn’t know about it,” Nessel said. “…So far we haven’t seen situations where somebody refuses to comply with the order once they're reminded the order exists.”

Among the consumer complaints received by her department have been hiked costs for toilet paper, Lysol, face masks and bleach at stores, while others have related to products bought at big box stores and resold on the street for exorbitant prices. 

Usually, stores that fail to comply with a cease and desist order could face fines up to $25,000 under Michigan’s Consumer Protection Act. 

An executive order from Whitmer Sunday prohibited Michigan sellers from charging a consumer a price more than 20% higher than what the business charged on March 9. A violation of the order could be treated as a misdemeanor. 

“Stores can run their business as they see fit; what they can’t do is charge prices that are in excess of regular prices,” said Joseph Potchen, director for the department’s consumer protection and civil rights bureau.

In a Tuesday letter to Menards, Nessel’s office said the store appeared to be doubling the price on cleaning supplies like bleach and increased the cost of face masks while tying it to a rebate. 

The attorney general’s office received 18 written complaints about Menards locations in Michigan in a week and visited locations to confirm the complaints. Investigators found the price of bleach doubled from $4.47 to $8.99 for a 121 ounce container and the store sold a two-pack of face masks at $39.95 with a $20 rebate. 

“…since Menards' rebates generally come in the form of a store voucher, it appears these masks have been used to drive additional purchases at Menards,” the letter said.

In a Wednesday letter, Nessel’s office noted a Hillsdale Ebay seller sold a two-pack of masks for $28.50 plus $2 in shipping. 

“Given the well-known fears surrounding coronavirus, it is apparent you were seeking to profit from an evolving public health emergency,” the letter said.

The department also has fielded reports of scam phone calls and emails. 

Some of those phone calls have been from individuals offering to reserve COVID-19 tests in exchange for a credit card number, Nessel said. Others have been callers pretending to be hospital officials informing the respondent that his or her loved one is in the hospital and needs payment information to receive care. 

Still other emails and phone calls appear to be from government officials or health departments fishing for personal information or access to an individual’s smart device.

If an individual receives such a call, hang up the phone, look up a separate number for the agency and confirm officials there were in fact attempting contact, Nessel said. 

“Whenever somebody’s reached out to you and you’ve not reached out to them first, don’t ever provide your personal information,” Nessel said. 

People can file a complaint at michigan.gov/agcomplaints or by calling (877) 765-8388.

eleblanc@detroitnews.com